Financial Services Regulation and Compliance - Funds June 2019

DOMESTIC      

New updated and consolidated Central Bank UCITS regulations

S.I. No. 230 of 2019,  Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019 (the Central Bank UCITS Regulations) are effective from 27 May 2019 with some transitional provisions.

This follows the Central Bank consultation CP119 and covers:

  • general amendments arising from a review of the Central Bank UCITS regulations
  • amendments to UCITS Share Class Provisions to reflect the ESMA opinion
  • amendments related to UCITS performance fees
  • amendments arising from the implementation of the EU Money Market Fund Regulation

Central Bank thematic review of UCITS performance fees

The Central Bank thematic review of UCITS performance fees has concluded.  Following on from this review the Central Bank’s guidance on UCITS performance fees has been codified in the updated Central Bank UCITS regulations. 

CBI publishes updated UCITS Q&A

On 6 June 2019, the CBI published the 26th edition of the Central Bank UCITS Q&A which includes new Q&A in relation to the Central Bank UCITS regulations 2019 regarding performance. The Q&A document has also been updated to account for the numbering of the regulations in the Central Bank UCITS regulations 2019.

The updates clarify that:

  • a UCITS is not required to charge performance fees on an individual basis under Regulation 40
  • a UCITS can crystallise and pay a performance fee upon the redemption of its shares by an investor
  • the limits applicable to deposits or cash booked in accounts and held as ancillary liquidity, in accordance with Regulation 7(2) of the Central Bank UCITS Regulations apply irrespective of whether the accounts are held for investment or ancillary liquidity purposes
  • Regulation 47 of the Central Bank UCITS Regulations (requiring that each UCITS establishes and maintains an email address for correspondence with the CBI) applies at umbrella level

Investment Limited Partnerships (Amendment) Bill (ILP) published

On 20 June 2019, the Government published the ILP, which amends the Investment Limited Partnership Act 1994 and reforms Irish law regulating investment limited partnerships.

The ILP Bill provides for various substantive and technical amendments:

  • it removes the unanimous consent required of all limited partners regarding any amendment of a partnership agreement
  • it permits an ILP to use an alternative foreign name outside the jurisdiction of Ireland
  • it clarifies that, in the event of insolvency, partners will not be required to contribute to ILP's capital and extending the limited liability provisions to ILP's
  • it allows for the structuring of an ILP as an umbrella fund

It is expected that the Bill will progress to Committee stage during Autumn 2019.

EUROPEAN

ESMA updates AIFMD and UCITS Q&As on depositary functions

ESMA published updated questions and answers documents (Q&A) on the application of the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for the Collective Investment in Transferable Securities (UCITS) Directive on 4 June 2019.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 10 July 2019